While the looming effects of the Volcker Rule has caused an exodus of prop traders to hedge funds, the latest move could have a overarching effects for JP Morgan and the hedge fund industry. Stewart was suppose to head up an Alternatives Unit at JP Morgan Asset Management—where most of the prop desks at JPM were moved to, and the departure of him and his team could be a blow to the bank, according to the Financial Times.

In contrast, Stewarts' entrance into the hedge fund industry with such strong credentials could also mean fireworks. From the FT:

Whard Stewart is likely to attract significant interest from investors and will almost certainly be among the biggest new entrants into the hedge fund world this year, if not since the credit bubble burst in 2007.